An appeal board of the Financial Services Board (FSB) has set aside the JSE’s findings that the Huge Group and its chairperson Anton Potgieter and CEO James Herbst had breached the exchange’s listing requirements.
The board also set aside the finding that the Companies Act was contravened.
The JSE imposed a censure on Huge Group in 2009, and imposed a penalty of R5-million each on Potgieter and Herbst, as a result of what it called “the breaches of their fiduciary duties as directors of Huge, and their actions that had resulted in breaches by Huge of the listing requirements”.
The charges related to Huge’s acquisition of 80 445 single stock futures positions constituted a repurchase of the company’s securities as defined by the JSE’s listing requirements.
However, the FSB appeal board found that Huge and its two directors entered into derivative transactions that “might or would” result in the repurchase by Huge of its securities in terms of a general authority without shareholder approval, which went against Section 5.69, read with section 5.82, of the exchange's listing requirements.
The penalties were replaced with fines of R3-million for each director.